Bogdan Tudorache

Euler Hermes predicts that Romania’s economy will record the worst quarterly contraction in more than 20 years in the second quarter of 2020 and, moreover, a steady decline in GDP until the first quarter of 2021.

EU membership, a competitive industrial sector and a relatively well-developed business environment, together with fairly good international relations, have helped Romania’s economy in recent years. Thus, even with a real GDP growth declining from +7.1% in 2017 to +4.4% in 2018, and +4.1% in 2019, the fact that the overheated economy was beginning to stabilize was clear.

However, this perspective was changed with the global Covid-19 crisis in the first quarter of 2020, which increasingly affected the Romanian economy through various channels.

“High frequency indicators suggest that production contracted sharply in March and beyond, with record rates in April. Although the austerity measures have been gradually more permissive since mid-May, we expect a gradual unblocking of the economy that will last at least until the end of 2020,” analysts say.

“We predict that the annual GDP will decrease by approximately -5.5% in 2020, and in 2021 it will register an increase of +4%. Thus, the level of real GDP in 2019 will not be reached before 2022, at the earliest.”